In a way, there's a "Person Needs Prayer Badly" in medieval European Catholicism... in order to go to Heaven (or reduced their time in purgatory) and join the Angels, the soul of the deceased needed to be prayed for. This led to the modern idea of the funeral, as well as other ideas.

It is still part of the Catholic beliefs, but you only pray for the soul in Purgatory as man has no role in deciding the salvation of souls.

According to current Catholic doctine, are funerals (and prayers) a way to "reduce" time of a soul in purgatory?

Welcome to Christianity.SE. It's not clear to me from your question what exactly you are trying to learn. Do you want to know about middle ages era Catholic doctrine or the history of funeral liturgy in general or a some other Christian tradition's doctrines regarding purgatory? Most Christian traditions don't even believe in purgatory at all, so whose perspective would you like to hear from?
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Caleb♦Nov 24 '11 at 10:04

The Jews at the time of (and before) Christ had burial rituals that are documented in the Bible. I don't know how similar they were to modern "funerals," but the Bible speaks of professional mourners who would be hired to mourn for days/weeks after the death of a loved one. I don't think most of them did this in response to a purgatory doctrine, since the doctrine of Heaven and Hell didn't even exist in its modern form until after Christ.
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FlimzyNov 24 '11 at 15:30

You know, you should get a -1 for hitting people with a link to tvtropes out of the blue. That site's dangerous! ;-)
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Jürgen A. ErhardNov 25 '11 at 22:22

3 Answers
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The short answer is that prayer can help shorten the time someone spends in Purgatory, but, as was pointed out, funerals predated Christianity so it would be incorrect to state that funerals will help shorten the time, in part, because funerals are a way for those that survive to reflect on and to have closure over the loss of a loved one.

1032 This teaching is also based on the practice of prayer for the
dead, already mentioned in Sacred Scripture: "Therefore [Judas
Maccabeus] made atonement for the dead, that they might be delivered
from their sin."609 From the beginning the Church has honored the
memory of the dead and offered prayers in suffrage for them, above all
the Eucharistic sacrifice, so that, thus purified, they may attain the
beatific vision of God.610 The Church also commends almsgiving,
indulgences, and works of penance undertaken on behalf of the dead:

Let us help and commemorate them. If Job's sons were purified by their
father's sacrifice, why would we doubt that our offerings for the dead
bring them some consolation? Let us not hesitate to help those who
have died and to offer our prayers for them.611

Scripturally you can look at 2 Maccabees 12, and you may want to read some part of the last section of this chapter for context, but at verse 46 is this:

46 It is therefore a holy and wholesome thought to pray for the dead,
that they may be loosed from sins.

5 When a period of feasting had run its course, Job would make
arrangements for them to be purified. Early in the morning he would
sacrifice a burnt offering for each of them, thinking, “Perhaps my
children have sinned and cursed God in their hearts.” This was Job’s
regular custom.

In the RCC those that have died before us are still part of our church, and much as Job made sacrifices to help purify his children, and much as prayers for the dead help them, we continue this tradition to help shorten the time people spend in Purgatory, as you cannot enter the gates of Heaven with any stain on your soul, so if you did not die perfectly in grace, you spend time being purified, then enter Heaven.

Now, this is different than worshiping the dead. Not all prayer is worship, prayer can also just be a way to talk with someone that you care about that isn't with you, for example. True worship should only be for God. This is often a point of confusion for non-catholics.

For those that want to argue about the validity of 2 Maccabees you may want to read this first to see what the early church fathers taught about the OT canon, for example that it was quoted by Cyprian of Carthage.

Probably the earliest detailed account of funeral ceremonial which has
been preserved to us is to be found in the Spanish Ordinals of the
latter part of the seventh century. Recorded in the writing is a
description of "the Order of what the clerics of any city ought to do
when their bishop falls into a mortal sickness." It details the steps
of ringing church bells, reciting psalms, and cleaning and dressing
the body.

Catholic funerals invoke powerful prayers for the dead. Other funerals may do so as well, and are potent inasmuch as they incorporate prayer to the Lord Most High.

Prayer is profitable for the souls of the dead in Purgatory, but to say that it 'shortens the time' one spends there is misleading at best. Medieval Catholicism would be rightly understood as saying that prayer and indulgence shortens the aeviternity in purgatory, and modern Catholic thought would agree with this (as would pre-medieval catholic thought, and pre-catholic way-ist thought, and pre-christian Abrahamic thought), but the word 'aeviternity' looks like gibberish to many readers. For modern Christians, it would be no less accurate and much less misleading to say that prayer lessens the suffering endured in Purgatory.